Real Estate Definitions
Impound, or Reserves: The portion of a borrower's monthly payments held by the lender to pay for taxes, hazard and mortgage insurance, lease payments, and other items that will come due.
Income approach: The method of estimating the value of a property by calculating its generated income.
Income property: Real estate developed for the purpose of generating income.
Indemnify: To provide for compensation in the case of loss or damage to property.
Indemnity: The statement of terms under which loss or damage to property will be compensated.
Index: A published interest rate used by lenders to compare the interest rate for an adjustable-rate mortgage (ARM) with that earned by other investments (e.g., the yield on Treasury bills, interest rate on loans from savings and loans institution, etc.), as a result of which the ARM interest rate is adjusted.
Ingress: The right to enter on or over a piece of property.
Insurable Title: A property title which an insurance company is willing to insure against possible claim.
Installment contract, or Contract for deed: A contract for the sale of real estate whereby the buyer is in possession of the property while paying off the purchase price in periodic installments, despite the title being retained by the seller until the future date of final payment.
Insured closing letter: An indemnity provided by a title insurance company to a lender, whereby the title insurance company assumes responsibility in the case that the closing agent does not fulfill the terms of the loan, or misappropriates the loan proceeds.
Insured mortgage: A mortgage that is protected by the Federal Housing Administration (FHA) or by private mortgage insurance (MI) so that if the borrower defaults on the loan, the insurer compensates the lender the lesser of the loss incurred or the actual insured amount.
Interest rate buydown plan: An arrangement made for the initial years of a mortgage whereby the seller (or any other party) deposits money into an account that is then released toward the monthly payments on the mortgage, thereby bringing the mortgagor's interest rate down below the actual interest rate.
Interest rate ceiling: The maximum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage note.
Interest rate floor: The minimum interest rate for an adjustable-rate mortgage (ARM), as specified in the mortgage note.
Interim financing: A temporary or short-term loan, often made during the construction phase of a building project, and usually replaced by a permanent long-term mortgage.
In testate: The condition of dying without leaving a will. The description of an estate without a will.
Involuntary lien: A claim or charge against property placed without the consent of the property's owner.